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Half year results: Maintaining strong performance momentum – 05 August 2015

8 November 2016

The Unite Group plc, the UK’s leading developer and manager of student accommodation, announces its half year results for the six months to 30 June 2015.


Strong financial performance

  • EPRA earnings up 45% to £29.6 million (30 June 2014: £20.4 million)
  • EPRA earnings per share up 30% to 14.2 pence (30 June 2014: 10.9 pence)
  • EPRA NAV per share up 20% to 521 pence (31 December 2014: 434 pence) equating together with dividends paid to a total return on opening EPRA NAV per share of 22.1% (30 June 2014: 6.1%)
  • On track to achieve like-for-like rental growth of 3.5% to 4.0% for the full year, up from 3.3% for 2014
  • Average portfolio yield compressed by 47 bps in the first six months to 5.8% (31 December 2014: 6.3%) and further compression expected over next 18 months
  • Interim dividend increased by 150% to 5.5 pence per share (2014 interim: 2.2 pence). Policy remains to distribute 65% of full-year recurring EPRA earnings by way of dividend each year

Excellent progress against strategic objectives

  • 55% of rooms now let through University nomination agreements, demonstrating strength of brand
  • Overhead efficiency measure improved to 40 bps on annualised basis (2014: 61 bps), illustrating continued scalability of platform. On track to hit 25-30 bps target by 2017
  • Portfolio quality enhanced further through positive progress with ongoing developments and £271 million acquisition by USAF of the high-quality AUB portfolio
  • Planning secured on sites in Edinburgh and Coventry
  • In exclusive negotiations to acquire three development sites with the potential to deliver approximately 1,800 beds for 2018 completion
  • Capital structure strengthened further as loan-to-value ratio reduced to 35% (31 December 2014: 43%) 
  • Net debt likely to be broadly flat over the full year

Well positioned for continued growth

  • Student numbers expected to rise to record levels for 2015/16 driven by removal of the UK/EU student number cap and sustained non-EU international demand
  • 90% of rooms reserved as at 3 August (2014: 85%) at levels supportive of 3.5% to 4.0% rental growth for the full year
  • Highly visible earnings growth trajectory remains a key feature. Delivery of development pipeline alone could add 17 pence to EPRA earnings per share by 2019 before accounting for prospective rental growth (EPRA EPS was 17.2 pence in 2014)

Mark Allan, Chief Executive of Unite Students commented: 

“Throughout the first half of 2015 we have continued to deliver against our three key strategic priorities: to be the most trusted brand in our sector, to operate the highest quality portfolio and to maintain the strongest capital structure. As a result we are delighted to report another set of strong results.

“Building on a period of consistent strong performance the Group remains well placed to deliver sustainable growth in the years ahead. Market conditions are supportive of rising demand, rents and capital values; our development pipeline and expertise positions us to add materially to both recurring earnings and NAV; our portfolio is focused on stronger Universities; and our highly scalable operating platform and strong brand leaves us well placed to extend our market leading position.”